Abstract
Studies of intergenerational mobility have typically focused on estimating the average persistence across generations. Here, we use the relatively new unconditional quantile regression technique to consider how intergenerational persistence varies across the distribution of sons’ earnings. We find a J-shaped relationship between parental income and sons’ earnings, with parental income a strong predictor of labour market success for those at the bottom, and to an even greater extent, the top of the earnings distribution. We explore the role early skills, education and early labour market attachment in shaping this pattern for the first time. Worryingly, we find that the association with childhood parental income dominating that of a high level of education at the top of the distribution of earnings. In this sense, education is not as meritocratic as we might hope, as those with the same detailed educational attainment still see a strong association between their earnings and their parental income. Early labour market spells out of work have lasting effects on those at the bottom, alongside parental income.
Highlights
Intergenerational mobility, the independence between the socio-economic status (SES) of parents and children, has been a topic of considerable attention in academia, policy circles and in the public domain in recent years
The focus of UK policy makers has been on three issues that reflect different parts of the distribution of incomes: (a) access to elite jobs (SMC 2014a, b, 2017b; HM Government 2015), (b) those who are stuck on low pay (SMC 2017a; HM Government 2015; D’Arcy and Hurrell 2014) and (c) the role of educational attainment in improving the life chances of poor children (HM Government 2011; HM Government 2015; Social Mobility Commission (SMC) 2017c)
We begin by focusing on unconditional quantile regression (UQR) estimates of the intergenerational elasticity (IGE) using childhood parental income14 and earnings at different point in time across sons’ adulthood to consider the changing patterns of any nonlinearities across the lifecycle
Summary
Intergenerational mobility, the independence between the socio-economic status (SES) of parents and children, has been a topic of considerable attention in academia, policy circles and in the public domain in recent years. The focus of UK policy makers has been on three issues that reflect different parts of the distribution of incomes: (a) access to elite jobs (SMC 2014a, b, 2017b; HM Government 2015), (b) those who are stuck on low pay (SMC 2017a; HM Government 2015; D’Arcy and Hurrell 2014) and (c) the role of educational attainment in improving the life chances of poor children (HM Government 2011; HM Government 2015; SMC 2017c) While each of these areas have been assessed separately, it is important to understand their relative contribution as different dimensions of the social mobility issue to the overall policy problem. Our second contribution is to consider the role of cognition, educational attainment and the labour market in accounting for these associations across the distribution
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